Fed's new chair Kevin Warsh sparks market downturns

European stock markets ended mostly higher on Wednesday as investors awaited the Federal Reserve’s first policy decision under new chairman Kevin Warsh. The STOXX Europe 600 rose 0.5% to 639.31 points, Germany’s DAX climbed 0.1% to 24,934, Italy’s FTSE MIB gained 0.3%, while France’s CAC 40 slipped 0.2% and the UK’s FTSE 100 edged up 0.1%.

In the United States, the Fed left benchmark rates unchanged but removed language about possible rate cuts, prompting fears of prolonged higher rates. The Dow Jones Industrial Average fell about 1% to 51,492, the S&P 500 dropped 1.2% to 7,420, and the Nasdaq slipped 1.4% to 26,022. Large‑cap tech stocks such as Microsoft, Meta Platforms and Amazon each declined around 3.5%, SpaceX shares fell 5%, and used‑car dealer Carmax plunged 9%.

Oil prices steadied near $80 a barrel as a provisional Iran‑U.S. agreement was set for signing, and analysts noted that despite Warsh’s dovish reputation, no immediate rate cuts are expected. The mixed market reaction underscored heightened sensitivity to monetary‑policy signals under the new Fed leadership.